Eagan v. Metropolitan Life Ins. Co.

• Decision Date: 21 May 1934
• Docket Number: 14863
• Citation: 155 So. 69
• Court: Court of Appeal of Louisiana — District of US
• Parties: EAGAN v. METROPOLITAN LIFE INS. CO

155 So. 69

EAGAN v. METROPOLITAN LIFE INS. CO

No. 14863

Court of Appeal of Louisiana, Orleans.

May 21, 1934

Rehearing denied June 11, 1934. Writ of certiorari denied July 2, 1934.

Spencer Gidiere, Phelps & Dunbar and W. B. Spencer, Jr., all of New Orleans, for appellant.

Raymond Gauche and John T. Charbonnet, both of New Orleans, for appellee.

OPINION

JANVIER Judge.

Plaintiff, as administratrix of the estate of Frank Romano, brings this suit on a policy of insurance issued on the life of the said Romano. The defense is that the deceased died as the result of a disease with which he was afflicted at the time of the issuance of the policy; that the disease was one of those named in the policy stipulation reading as follows:

"If, (1) the Insured is not alive or is not in sound health on the date hereof; or if (2) before the date hereof, the Insured has been rejected for insurance by this or by any other company, order or association, or has, within two years before the date hereof, been attended by a physician for any serious disease or complaint, or, before said date, has had any pulmonary disease, or chronic bronchitis or cancer, or disease of the heart, liver or kidneys, unless such rejection, medical attention or previous disease is specifically recited in the "Space for Endorsements' on page 4 in a waiver signed by the Secretary, then, in any such case, the Company may declare this policy void and the liability of the Company in the case of any such declaration or in the case of any claim under this policy, shall be limited to the return of premiums paid on the policy, except in the case of fraud, in which case all premiums will be forfeited to the company."

There can be no doubt that the death was caused by one of the specified diseases and that the deceased was afflicted with the disease when the policy was issued, but plaintiff contends that, notwithstanding these facts, there is liability because of the provisions of Act No. 97 of 1908, which we have often quoted, but which, for convenience, we again set forth:

"Providing that life, health and accident insurance companies, which issue policies or contracts of insurance to the assured without a medical examination by a physician, shall waive their right to claim forfeiture for misrepresentation, etc.; under certain conditions.

"Section 1. Be it enacted by the General Assembly of the State of Louisiana, That whenever life, health or accident insurance companies, which issue policies or contracts of insurance to the assured without a medical examination of the assured by a physician, it shall be presumed (whenever it appears that the agent of the company has had an opportunity to ascertain the true condition of the health, habits or occupation of the assured, and has certified to the company the desirability of the risk), that the knowledge acquired, or which might have been acquired with reasonable diligence by the agent of the company in securing the application, as to the health, habits or occupation of the assured, has been disclosed to his principal; and it shall also be presumed that the company has waived its rights to claim a forfeiture of the policy based on the ground that the assured did not make true and full answers in the application as to the health, habits or occupation whenever it shall appear that the agent of the company knew, or might have ascertained with reasonable diligence, the true condition of the applicant's health, or the real facts as to his habits or occupation, knowledge of the agent of the company in writing the application, or of the collector of the company in collecting the premiums from the assured, shall be imputed as notice to the company, as to the health, habits or occupation of the assured."

It is conceded that the policy was issued without medical examination; but defendant contends that, since the disease was one which could not have been discovered except by a medical examination, the company's agent who secured the application did not have opportunity, by the exercise of reasonable diligence, to ascertain the true condition of the applicant's health and that, therefore, the statute does not prevent the setting up of the defense relied on; in other words, that, where a policy is issued without a medical examination, the requirement of the statute that the agent must exercise reasonable diligence to ascertain the true condition of the health of the applicant and that, if he does not do so, the company nevertheless will be presumed to have had knowledge of the said true condition, does not make it necessary that a medical examination be resorted to, but that reasonable diligence has been exercised when the agent has otherwise discovered all except that which might have been discovered only by a medical examination.

Plaintiff, on the other hand, maintains that reasonable diligence has not been exercised unless a medical examination has been made, and that since, in the instant case, there was no such examination, there was no exercise of reasonable diligence, and that, as a result, because of the provisions of the act of 1908, it must be presumed that the company has waived its rights to claim a forfeiture of the policy based on the ground that the applicant was at the time of the issuance of the policy suffering from one of the specifically set forth diseases, and was, therefore, not in good health.

In the lower court there was judgment for plaintiff, and defendant insurer has appealed.

It is evident that, except as a result of medical examination, it would not have been possible for the agent of the insurer to have discovered the true condition of the insured because even his friends and relatives did not know of that condition. In fact, his sister, who, as administratrix of his estate, is plaintiff in this suit, testified that "he was apparently in good health" and that she "had no reason to suppose that he was suffering from any disease such as the disease he had when he died" and that none of the neighbors realized "that he was suffering from such a disease (3)5C."

The question is an interesting one. In Cherry v. Metropolitan Life Ins. Co., 143 So. 121, we gave it full consideration, and in that case reached and announced the conclusion that the statute cannot be construed as plaintiff here asserts we should interpret it. If plaintiff's contention is to be adopted, then the statute must be construed as declaring that, where there is no medical examination, the insurer must be presumed to know all that a medical examination would have disclosed. We see no necessity for another extended discussion of the subject, and we adhere to the views which we have set forth in the Cherry Case and which we also expressed in Hulbert v. National Life &amp Accident Ins. Co., 151 So. 87, and which are also found set forth in Hammond v. Metropolitan Life Ins. Co., 12 Orleans App. 82. We have, however, given serious consideration to the contention that the Supreme Court, in Massachusetts Protective Ass'n v. Ferguson et ux., 168 La. 271, 121 So. 863, 865, to which we did not directly refer in the Cherry Case, announced a view diametrically opposed to that reached by us in the Cherry Case. We gave the Ferguson Case full consideration, but we did not interpret it as holding that the health of the applicant cannot be availed of as a defense where there has been no medical examination, and we, therefore, did not cite it by name, but we did cite our decision in Williams v. Unity Industrial Life Insurance Co., 14 La.App. 680, 130 So. 561, in which we had, in terms, cited the Ferguson Case. In the Ferguson Case the court held that the insured himself believed and was justified in believing that the disease, which he had previously had, had been cured, and that, therefore, there had been no fraud on his part in failing to disclose a fact of which he himself either had no knowledge, or was justified in overlooking, and that there was no certainty that the disease with...